Place Branding Strategies for Municipality

Bachelor degree project in marketing 15 ECTS Spring term 2008 Course: FE3923 Group 3 Authors: Jungmin Choi 840929 Jesper Persson 841004

Examiner: Mosad Zineldin

Abstract Title: Place Branding Strategies for Date of Seminar: June 5th 2008 Course: FE3923 Bachelor Thesis in Marketing Program Authors: Jesper Persson, Jungmin Choi Tutor: Mosad Zineldin Examiner: Mosad Zineldin Keywords: Place branding, Place marketing, Gap analysis, Co-opetition,

Thesis Purpose: The purpose of this study is to develop an increased knowledge of place branding, study the perception of inhabitants’ regarding Alvesta as a place and to explore an extended relationship between Alvesta and Växjö municipality.

Methodology: The methodology of the study is conducted with qualitative and quantitative approach. There were two interviews in Alvesta and Växjö municipality office. A total number of 216 questionnaires were gathered in three urban areas in Alvesta municipality.

Theoretical Framework: For this study place branding theory has been used as a guideline and SWOT, Gap analysis and Co-opetition theory were used to analyze Alvesta municipality as a place and its inhabitant’s perception.

Empirical Finding: A total of 210 questionnaires were analyzed statistically through SPSS with functions such as cross tabulation, compare means, and scale reliability analysis. Also the results of two interviews with the Alvesta and Växjö municipality are written in this chapter regarding the theories used in this thesis.

Analysis: The analysis chapter integrates the theory and the results of the empirical findings. Alvesta’s brand and service were evaluated based on SWOT and gap analysis. A co-opetition relationship was suggested between Växjö and Alvesta municipality in different issues such as branding, infrastructure and education.

Conclusion: From this study we have attained insight that Alvesta municipality is in the initial stage in branding and there is a service gap in the inhabitants’ perception. Finally this study contributes how Alvesta municipality can create mutual value by cooperating and competing with Växjö municipality.

2 Table of Content

1. INTRODUCTION ...... 5 1.1 Background ...... 5 1.2 Problem discussion ...... 6 1.3 Purpose ...... 7

2. THEORY ...... 8 2.1 Place as a brand ...... 8 2.2 SWOT Model ...... 9 2.3 GAP Analysis ...... 11 2.4 Co-opetition ...... 15 2.4.1 Advantages of Co-opetition ...... 16 2.4.2 Disadvantages of Co-opetition ...... 17

3. METHOD ...... 18 3.1 Qualitative and Quantitative Characteristics and Usage ...... 18 3.2 Data collection ...... 19 3.2.1 Primary Data ...... 19 3.2.2 Secondary Data ...... 21 3.3 Reliability ...... 21 3.4 Validity ...... 22

4. DELIMITATION ...... 23

5. EMPRICAL FINDINGS ...... 24 5.1 Questionnaire answers ...... 24 5.1.1Demographics of the respondents ...... 25 5.1.2 Questions 7-17 Service Gap ...... 26 5.1.3 Questions 21-23 Perception about Växjö municipality ...... 29 5.1.4 Questions 24-25 Co-opetition with Växjö municipality ...... 31 5.1.5 Question 26 ...... 32 5.2 Interview with Alvesta municipality ...... 33 5.3 Interview with Växjö municipality ...... 38

3 6. ANALYSIS ...... 41 6.1 SWOT Analysis of Alvesta municipality ...... 41 6.2 Alvesta Service Gap Analysis ...... 42 6.3 Alvesta municipality as a brand ...... 45 6.4 Co- opetition with Växjö municipality ...... 48 6.4.1 SWOT of Växjö municipality ...... 48 6.4.2 Cooperation and Competition with Växjö municipality ...... 50 6.4.3 Implementation of Co-opetition Strategy ...... 52

7. CONCLUSION ...... 55 7.1 Conclusion of the Study ...... 55 7.2 Suggestion for Further Research ...... 56

8. REFERNECE LIST ...... 57

Appendix

Appendix 1 Data collection from the questionnaire ...... 59 Appendix 2 Demographic case processing summary ...... 59 Appendix 3 Demographic Cross tabulation analysis...... 60 Appendix 4 Reliability Analysis – Scale (Alpha) ...... 61 Appendix 5 Questionnaire ...... 62

Figure Index

Figure 1 Brand positioning ...... 8 Figure 2 Conceptual Model of Service Quality ...... 12 Figure 3 The Expansive Växjö Network ...... 39

Table Index

Table 1 SWOT Model ...... 10 Table 2 Q7-16 Case processing summary ...... 26 Table 3 Q7-16 Compare means analysis ...... 27 Table 4 Q7-16 Reliability analysis - Scale ...... 28 Table 5 Q17 Overpromised service perception ...... 29 Table 6 Q21 & 22 Moving possibility to Växjö & Reasons ...... 29 Table 7 Q23 Perception of Växjö municipality ...... 30 Table 8 Q24 & 25 Co-opetition with Växjö municipality ...... 31

4 1. INTRODUCTION

In this chapter we have written a short background of the thesis, followed by a problem discussion and the purpose of the thesis. The main objective of this chapter is to increase interest for our thesis and to clarify what our thesis will be about.

1.1 Background

“The brand is a multidimensional construct whereby managers augment products or services with values and this facilitates the process by which consumers confidently recognize and appreciate these values”. (De Chernatony & Dall’Olmo Riley, 1998) This statement suggests that a brand consist only of products or services and with the brand managers’ help it should have a good perception in the consumers mind. If this statement is to be considered acceptable in all fields of branding, it means that place branding can be used as product branding and that places are just spatially enlarged products. However, the reality is far more complex.

Places have always had the need to develop, whether it concerns industry, tourism or the attraction of new inhabitants to the specific country, region or city in question. The differentiation to other places is what makes a particular country, region or city unique in various different perspectives. It was not until 20 years ago that literature got to a more similar conclusion that marketing can be adapted to places. (Kavaratzis & Ashworth, 2005, p 506) This suggest that more concrete thoughts were assembled first in the 1960s, literature wise. Not before the 1990s, was there any serious effort to generate a real marketing approach to places (Kavaratzis & Ashworth, 2005, p 507) It is today that people got to understand to come across places through perception and images. “People create perception through direct experience of the environment or indirectly through media representations”. (Holloway & Hubbard, 2001, p 48) Place branding therefore puts the people in the center of an activity to change a place and influence its future. In order to manage a place brand, one must influence the mental maps of the inhabitants in a manner that concurs to the present circumstances of the place in question. (Kavaratzis & Ashworth, 2005, p 507) As stated above if place branding can be to apply product branding it can be said that a place will also have competition in the market and has to deal with competitors and make a great

5 effort to be attractive. Therefore place branding has been an interesting subject and it relates not only to big cities but also to small places as well.

1.2 Problem discussion

Alvesta municipality is located in the province of Småland in in southern . The municipality was created in 1971 when the market town Köping was united with four surrounding rural municipalities. Today it consists of six urban areas: Alvesta, , , Grimslöv, and . (Nationalencyklopedin, 2000, band 1) The area is primarily characterized by railroad station and for the heavy production industry, which has lead to the fact that there are many occupations in the region such as; metal- & mineral-products machine operators, building frame and related trades workers and motor vehicle drivers. The population of the municipality is 18,776. They live in an area of 974 km². The municipality had a steady negative growth in population from the year of 1996 to 2005 with only one year of exception in 2001. The last two years it has had a positive growth but with only low percentage less than 1% of its total population. (Alvesta kommunfakta07) According to the marketing manager Tomas Hedevik, the current perception of Alvesta municipality by its own inhabitants and the outside municipalities is poor and more and more people are moving out to Växjö municipality. Växjö municipality is located west to Alvesta municipality which is famous for student city and has an increasing population with a young age profile and it is building a new brand “The Greenest City in Europe”. Every year Växjö municipality is attracting more and more people due to its dynamic image and it is to be seen as a major competitor to Alvesta municipality. Therefore Alvesta municipality as a place needs a new effective marketing strategy in order to attract more people to move in. Alvesta municipality has started to develop as brand by using a certain platform: ”Big enough to let ideas be born and developed but Small enough to allow everyone to be seen.” (Tomas Hedevik) According to this concept, four major organizations within the municipality have been developed in order to serve specific target groups; school and social care, working and learning, elder care and health and community planning. Although Alvesta municipality’s provided services have not been analyzed from the inhabitants’ perspective and the perception of its place is unclear according to Tomas Hedevik. Also there is a need to examine what the

6 upcoming relationship with Växjö municipality will be considering the strength, weakness, opportunity and threat in both municipalities.

Therefore these are the questions that this study attempts to answer. What is the internal and external factor that influences Alvesta municipality in place branding? What is the difference between expected perception and existing perception in Alvesta municipality and its inhabitants? Can co-opetition relationship develop between Alvesta municipality and Växjö municipality? (Co-opetition is a term used in an article “Co-opetition: the organization of the future” by Mosad Zineldin, 2004 which states a business situation where independent parties co-operate with each other but at the same time compete with each other as well as with other companies.)

1.3 Purpose

The purpose of this thesis is to understand how the inhabitants perceives Alvesta municipality so that the gap between the present perception and the desired state can be assessed. The purpose is to analyze the gap between the experienced service and the expected service. This approach will help Alvesta municipality building an effective strategy and help to locate the desired brand position for the future to come. The purpose finally involves a view of the possibilities of a mutual beneficial and competitive relationship between Växjö and Alvesta municipality.

7 2. THEORY

This chapter will introduce relevant theory for the topic of our study. The selection of the theories is based on the purpose and research question. The chapter begins with branding theory, followed by SWOT analysis, GAP theory and is developed further to theories about the strategies competing and cooperating with Växjö municipality in the future.

2.1 Place as a brand

Applying branding theory in place will guide our work throughout the whole process and will enable us to be consistent and to integrate all different theories used in our research.

Place brand can be defined as a multidimensional assortment of functional, emotional, relational and strategic elements that integrate and generate a unique set of associations in the public mind. Also it is said that branding is a mode of communication. From the consumer’s side, central to the concept of the brand is the brand image, which incorporates perceptions of quality and values as well as brand associations and feelings. (Chernatony and Dall’Olmo Riley, 1998) The core of place branding of success is to build strong relationship between the brand and the public. It is important to have a close fit between the people’s physical and psychological needs since brand closely relates to perceived quality and values. Therefore to build strong relationship brand identity, brand positioning and brand image theory can be used to apply place-branding strategies. < Figure 1 Brand positioning, Kavaratzis & Ashworth, 2005>

Brand image is what actual perception of the brand is on the receiver’s side. Image research focuses on the way in which groups perceive a product, a brand, a company or a country. The

8 image refers to the way in which these groups decode all the signals sent from the products, services and communication covered by the brand. (Kapferer, 1997, 94p) According to Barnes (2003) it is important to create a strong brand image in the consumers mind. The brand image is built up by associations in the perception of consumers mind. Creating value for the consumers leads to the satisfaction of the brand and its loyalty.

Brand identity is how the company wants the brand to be perceived by the consumers. It is important to send a clear brand message to people. The purpose in place branding is to specify the brand’s meaning and self image of the place. (Kapferer, 1997, 94p) Brand identity consists of the associations the place want people to have in the future. It is about how the place wants to target people to view the brand and the benefits they expect to receive from it. It should influence future activities and decisions. In place branding it is important to build an identity that embraces credibility and reliability that the place can sustain for a long period of time.

Positioning a brand means emphasizing the distinctive characteristics that make it different from its competitors and appealing to the public. It is essential for a place as a brand to distinguish its brand and promote its key values and advantages according to its positioning. (Kotler et al, 1993) Brand positioning must try to communicate what the core values stands for and make special comparison to other brands which help identifying its own brand.

2.2 SWOT Model

To brand Alvesta municipality as a place our first task is to identify current brand image and the current state of Alvesta municipality. The SWOT analysis will be helpful to get a better view of what is important for the municipality. This model will be a good base to use for the possibility to make final branding suggestions for this municipality and will be used throughout our studies as a foundation to construct the gap analysis and the co-opetition theory. Although not all the aspects of this theory will be applied to our studies due to the fact that this theory was based on product marketing. SWOT model is an overall analysis of its Strength, Weakness, Opportunities and Threats. It involves analyzing the internal and external factors of the market environment. (Kotler.P, 2003) The analysis is mainly qualitative and gives two different concepts of market

9 attractiveness (external factors) and company attractiveness (internal factors). SWOT analysis is a simple and straightforward model that provides what a company currently can state as their strengths and weaknesses and the environmental conditions for opportunities and threats. The purpose of SWOT model is to seek the strategic fit by highlighting its strengths, minimizing weaknesses and further more to pursue opportunities and avoid threats. Lists of issues are stated below. (Ferrel et al,1999)

Internal strengths External opportunities Abundant financial resources Rapid market growth Any distinctive core competence Rival firms are complacent Economies of scales Changing customers needs and wants Lower costs Demographic shift Good market image Other firms seeks alliances Committed employees New uses for product discovered Supior management talent Sales declining for substitute Internal weaknesses External threats Lack of strategic direction Introduction of new substitutes Weak spending on R&D Changing consumer needs and tastes Higher costs Rival firms adopt new strategies Internal operating problems Demographic shifts Weak market image Poor performance of ally firms Poor marketing skills Entry of foreign competitors Limited management skills Recession Under trained employees Source : Ferrel et al. (1999, p 62)

10 2.3 Gap analysis

According to Kotler.P (1993, 100p) to attract more people, a place needs to develop generic strategies for improvement and those strategies are place design, infrastructure, and service strategies. Considering the size of the municipality financial resources can be restrained to improve all these 3 areas. Among these strategies offering high quality service is where value can be added to the inhabitants. Thus a place should think about how the services can be performed better to the public. In order to analyze the core service provided by the place we have chosen to use GAP theory to understand the perception of the inhabitants and the municipality. Services in general cannot be measured, calculated and inventoried to ensure adequate quality by the same means as products because they are performances rather than objects. Services are not constructed through production and delivered in one piece to the customer. However, these facts do not indicate that the quality of services cannot be measured or that research on this subject is uncalled for. Research has shown that providing high quality services do in fact create calculable benefits. The problem consists of measuring those benefits. Therefore the gap analysis, which is a quality service model, was developed (Zeithaml, Berry & Parasuraman, 1988, p 35) The model attempts to explain that consumers’ quality perception and understanding are influenced by a sequence of gaps in an organization.

Gap 1 Involves the difference between consumer expectations and management perceptions of consumer expectations Gap 2 Involves the difference between management perceptions of consumer expectations and service quality specifications Gap 3 Involves the difference between service quality specifications and the service actually delivered Gap 4 Involves the difference between service delivery and what is communicated about the service Gap 5 The difference between perceived service and expected service

11

Only gap 1,4,5 will be used in this thesis although all the gaps will be explained below. Gap 1 This gap basically involves the difference between consumers’ expected perception of service and what managers think the consumer’s expect. The size of the gap is determined by three factors; Marketing research orientation, upward communication, and levels of management. Service firms in general put less focus on market research than what is made dealing with a tangible product. (Zeithaml, Berry & Parasuraman, 1988, p 38) If that is the situation, less contact with the consumer will occur, which leads to the fact that focus is being withdrawn from the customer. When that happens, it is harder for the firm to understand the customers’ expectations and thus, makes this gap larger. Therefore one can say that the less market research, the larger this gap will become. The extent to which managers directly congregate with consumers also influences the degree of market research done by a firm. If a manager in a firm spends more direct time with the customer, this person will acquire better knowledge about the customer’s expectations. The gap will then decrease. Upward communication in a firm involves the degree and efficiency level to which lower level employees in the organization communicates the quality perception of the consumer to the top managers. If the communication is good, the top managers can acquire decent

12 information about the consumer’s quality perception about the product from the customer contact personnel or non-company personnel. (Zeithaml, Berry & Parasuraman, 1988, p 38) An important factor in this part of communication is the way the communication is conducted. If the message from the customer contact personnel to the top managers’ is delivered through a written message as e-mail or letter, the information that the receiver acquires could become unsatisfactory. If the message instead is being delivered face-to-face, the information is more likely to be better and create understanding regarding the consumer’s perception of the quality of the service will be provided to the top managers. That is why it is possible to say that the better upward communication is conducted in organization, the smaller gap one will be. The number of levels in management of a firm is also likely to affect the size of this gap. If there are more layers between top management and consumer-contact personnel, the message will be less clear when getting received by the final receiver. That is due to the fact that these extra layers create barriers with different opinions regarding the quality issue at hand and alters the original message that was supposed to be delivered.

Gap 2 This gap involves the difference between the specifications of a service set by managers and the actual expectations of the consumers’ regarding the quality of the service provided. The difficulties here are for the managers to match what they believe is a good standard for a service to the consumers’ expectations of the service. The factors that affect this gap are goal setting, task standardization and perception of feasibility by the managers. In our research, we will not consider the internal organization structure of Alvesta municipality and not make detailed descriptions of specifications of different services because these issues are too far away from our subject and make a different final, not intended, conclusion for our paper.

Gap 3 Gap 3 is the gap between specifications of how a service should be delivered and how it is actually delivered. It is mainly a performance gap that is created when the actual service providers not are performing to the standards that the managers have set. The reasons to why the service providers does not live up to their expectations is a result of several factors such as poor team work, bad employee-job fit, bad technology-job fit and harsh supervisory control systems that leaves the service providers with little or no creativity in their work.

13 This gap will not be involved in our research due to the major work effort that this gap will require. If used, interviews would have to be made with each service deliverer that Alvesta municipality controls. The actual people involved in controlling the service delivery of for example elderly care and garbage handling would also have to be interviewed. That would have to be followed by an extensive comparison, which would be time consuming and take away the focus from other parts of our research.

Gap 4 This gap concerns all types of external communication that the organization makes that in the end makes an impact in expected quality of a service from the consumer’s side, e.g. the service delivery. The factors that affect the size of this gap are horizontal communication and propensity to overpromise. Horizontal communication is the information that goes between and inside the departments of the organization. (Zeithaml, Berry & Parasuraman, 1988, p 44) The information between and within departments need to be solid enough to organize the workers in the firm towards overall goals. If the goal of the firm involves making the consumer perceive high quality, which it hopefully is, horizontal communication is important. An example of important horizontal communication is the interaction between the marketing department and the close contact personnel that has direct contact with the customer. If these departments do not communicate in a good way it can result in a poor delivery of the service. That is because if the marketing department conducts a research that the close contact department does not fully grasp, they might offer their service in the wrong way, which directly leads to bad perception of the quality of the service from the consumers’ side. Therefore, poor horizontal communication leads to an enlargement of this gap. The propensity to overpromise happens when a service firm is pressured to perform a high quality service because of various competitors in the same service field. If a specific service firm perceive a certain branch as in general full of overpromises of the quality of a service, the greater will the propensity to overpromise be. This fact is directly linked to the size of this gap because the more you overpromise the quality of a service, the worse will the final perception of the quality of the service be from the consumer’s point of view. This will happen if the firm does not deliver the quality as you promise with your advertising.

14 Gap 5 The last gap involves the difference between the perception of service and expected service from the customers’ and marketers’ point of view. The expected service depends on social interactions between consumers’, their personal needs, and past experience of different services. The perception of service can only be understood through analysis of one to four of the previous gaps in order to find out what factors that affect the delivery of the service and estimating the size of the gaps. (Zeithaml, Berry & Parasuraman, 1988, p 45) If gap five is negative, the firm is suffering from quality problem and poor social interaction between consumers’ regarding the quality of the service in issue. The gap could also involve obtaining a negative local image and can result in loss of business for the organization.

2.4 Co-opetition

The major competition with Alvesta municipality has been with Växjö municipality over the years. Växjö municipality can be an external threat and an opportunity for Alvesta municipality. Thus it is important to understand the relationship with both of the municipalities to seek mutual benefits and to create synergy rather than competing with each others. Therefore we are applying this theory to suggest a future need of partnership in cooperating and competing in a good way for both Alvesta municipality and Växjö municipality.

“Co-opetition” describes a business situation in which independent parties co-operate with one another and co-ordinate their activities, thereby collaborating to achieve mutual goals, but at the same time compete with each other as well as with other firms. (Zineldin, 2004, p 780) Co-opetition theory suggests that organizations or companies can interact in rivalry due to conflicting interests and competition, but at the same time cooperate due to common interests. The overarching goal for this theory is to create mutually beneficial exchanges and add value for each party by competing and cooperating.

There are 7 criteria in the co-opetition article (Zineldin, 2004, p 780) but we have combined them to 5 criterias to successfully implement this theory for Alvesta municipality.

15 Criteria 1 Two or more individuals, groups or organizations should be willing to engage in an interactive exchange relationship that is the partners need to have a strong motivation to start relationship. Criteria 2 Each party possesses something of value that the other party wants. Shared value should contribute to each other in order to increase the interdependence level and to keep long term relationship. Moreover each party is willing to give up its “something of value” to receive in return the “something of value” belonging to the other party – in other words, the relationship is perceived to be mutually rewarding. Criteria 3 Each party is free to accept or reject terms and conditions of exchange that will leave them better off (or at least not worse off) than before the exchange. In order to do this organizational arrangements and institutionalization should be defined clearly. Criteria 4 Each party should be able to communicate and interact without restrictions. Each of the party should have trusting attitude by sharing information and knowledge together. Also they should respect each other and show mutual integrity and act in honorable ways. Good communication is essential to keep healthy relationship. Criteria 5 The parties can strike a positive balance between the pros and cons of the relationship. One of the features of co-opetitive relationships is that the parties adapt their processes and products to achieve a better match with each other so it is important to balance the positive and negative factors.

2.4.1 Advantages of Co-opetition Organizations and companies in a co-opetition relationship have many benefits due to the fact that they are working together. By for example making joint purchases and investments, they can split the risk of finance and also tackle the uncertainty of future issues they face, in a better way. The organizations in the relationships can also use different contacts in their normally separate networks together and thereby use the connections in a more beneficial way, for both firms. These joint networks can help achieve a growth in profit. These types of relationships

16 can also create major opportunities for the organizations involved, such as proceeding over before legal boundaries regarding research with a better-established R & D program. From that moment on the program can create products of a higher quality and also in a greater magnitude. The relationship can also be beneficial due to the loaning of personnel between the organizations, which will result in a better skilled labor force for both parties involved. Co-opetition relationship can even give the organizations get involved in a higher level of technology, which could be helpful to reach a new market and create a better product that in turn creates a higher customer value. (Zineldin, 2004, p 785-786)

2.4.2 Disadvantages of Co-opetition Even though a co-opetition can increase the profits and create other significant benefits the reality for the involved organizations is important to underline the difficulties and disadvantages with such a relationship. The first issue that has to be considered by the firms involved is the major resources that are required to move together in any area of expertise. The resources used for the building of the relationships could easily become higher than the actual profits of the business connection. The startup cost and the resources needed are also factors that are highly unpredictable and could be underestimated. The fact that both organizations may be used to making business alone can create time-consuming discussions on management level, regarding the important decisions they now have to face together. This fact can disturb the normal efficiency level in both the organizations in the co-opetition relationship and helps create conflicts. Another hard issue is the adaption that both the organizations in the relationship have to make in order to function with each other. It is time consuming to learn and to understand each other. Coordination regarding important activities might be difficult to manage together. These adaptations can be extremely time and money consuming and involves major factors such as technology and cultural factors. Throughout the whole process of these adaptations, a large amount of money is spent, which might not return. (Zineldin, 2004, p 786)

17 3. METHOD

This chapter seeks to describe the steps and methods of this thesis. It presents the process of obtaining information, collection of the empirical data about questionnaire and interviews.

To collect data about people’s attitudes, perceptions, motivation, knowledge and intended behavior asking question is essential. (Kinnear.T, Taylor. J, 1999, p 146) The research design can range from questioning a few knowledgeable individuals characterize as qualitative method to surveying hundreds of respondents which is qualitative method. This paper will utilize a mix between qualitative and quantitative research methods. The characteristics and the use of both the methods in this paper regarding data collection and analysis will now be explained in detail.

3.1 Qualitative and Quantitative Characteristics and Usage

Qualitative Research There is no real definition of qualitative research that can be applied to all types of papers and research fields, which means that there is not either any commonly accepted approach to this type of research. (Van Maanen, 1979, p 520; Ghauri & Gronhaug, 2005, p 204) tries to give a more general explanation of this phenomenon. He suggest “It is at best an umbrella term covering an array of interpretative techniques which seek to describe, decode, translate, and otherwise come to terms with the meaning, not the frequency, of certain more or less naturally occurring phenomena in the social world”. This statement suggests that this type of research can cover many different data gathering methods and ways of understanding and interpreting the data in question. Also this way of understanding the data is different depending on the situation, since qualitative research method only is an overall expression. The method seeks to primarily understand unstructured problems by collecting non-standardized data that is related to meanings expressed regarding an issue. This data can then be put into categories and analyzed through conceptualization. (Ghauri & Gronhaug, 2005, p 204)

18 Quantitative research Quantitative research is designed to explain what is happening and the frequency of occurrence and it is usually conducted by asking large sample of respondents. (Kinnear.T, Taylor. J, 1999, p 146) This research method is suitable for gathering people’s knowledge, attitude and preference by conducting surveys in a logical and critical approach. This method emphasizes precise objective and controlled measurement. Also data are in numbers and the analysis proceeds by using statistics, tables or charts and discussing how and to what degree they relate to the hypotheses. (Ghauri & Gronhaug, 2005, p 110)

3.2 Data collection 3.2.1 Primary Data For the primary data collection of our study we have chosen personal interviews and surveys using questionnaires.

Interviews will be conducted with the marketing responsible of Alvesta municipality and the person on equivalent level in Växjö municipality. The questions to the marketing responsible of Alvesta municipality will primarily concern SWOT of the Alvesta municipality and his current expectations of what the perceptions of the inhabitants of Alvesta municipality are. The questions to this person will also concern the possibility of a co-opetition between Alvesta and Växjö municipality and questions regarding the making of a SWOT analysis of Alvesta municipality. The same type of questions regarding co-opetition will be asked to the marketing responsible of Växjö municipality.

Surveys refer to a method of data collection that utilizes questionnaires or interview techniques for recording the verbal behavior of respondents. (Ghauri & Gronhaug, 2005, p 124) We will carry out questionnaire sampling according to the five steps of sampling design process. (Malhotra. K, 2004, p315)

Step 1 Define the target population The target population for the questionnaire is defined as below: Elements: male or female of the household who are in the age group of 18 to over 65 Extent: Alvesta Municipality (Alvesta, Moheda, Vislanda) Time: May, 2008

19 Step 2 Sampling Frame To identify the target group we will use the Municipality Fact report as a sampling frame and we have categorized them into 6 groups according to age. Step 3 Sampling Technique We will use the Convince Sampling to obtain data from the respondents. This technique is to obtain a sample of convenient elements by the selection of sampling by the interviewer which means that respondents are selected because they are coincidently in the right place at the right time for the questionnaire. Step 4 Sample Size Determining the sample size is complex and involves various considerations. Sample size can be influence by the average size of samples of similar studies. Considering the resource constraints we determined to have 200-300 respondents. Step 5 Execution Sampling execution will be done by conducting questionnaire in face-to-face approach.

Questionnaire measurement and analysis method We will use the Likert scaling approach to measure the gap between the perception of service and expected service regarding Alvesta municipality as a place. Likert scale requires the respondents to indicate the degree of satisfaction or dissatisfaction with five numerical score. The questionnaire will also have open end question to allow people to suggest an idea to improve Alvesta municipality also the questionnaire will be in Swedish but translated in English for the analysis. After carrying out the questionnaire we will use SPSS (Statistical Package for the Social Sciences) program to analyze the collected data. We will use Descriptive statistics Crosstab analysis and Means analysis. Descriptive statistics is an analysis method to describe the attributes of the collected data and to find out the value of one variable is contingent upon that of another. Compare Means analysis is to calculate subgroup means and related univariate statistics for dependent variables within categories of one or more independent variables. For the reliability analysis we will use Scale reliability analysis. There are normally two different kinds of reliability that need to be taken into consideration when it comes to scales. The test-retest reliability is when one conducts the research with the same people at two separate occasions and then compares and correlates these two values with each other. The second part is the internal consistency, which measure the degree to which the items that the scale is made from, all are related to the underlying characteristic. One of the more normal

20 ways to measure this is with Cronbach’s coefficient alpha. This can be calculated, using the inter item correlation function in the SPSS statistical program. What happens is that one receives a correlation matrix that shows the items that the scale is made from with values ranging from 0 to 1. A higher value means a higher reliability of the correlation between the items. (Pallant.J, 2006) The next important values that are illustrated in this type of analysis is the Cronbach’s alpha value and the mean inter item correlation. The Cronbach’s alpha is acceptable with a minimum level of 0.7. (Nunnally, 1978) If it is too low, the mean inter item correlation can be reported in instead. This value is in optimal range fluctuating between 0.2 and 0.4 (Briggs & Cheek, 1986)

3.2.2 Secondary Data

For the secondary data we will use external sources, gathering information through published books, articles, annual report of the municipality and general statistics. We believe that secondary data will help us understand Alvesta municipality’s situation and potential concerns that merit in-dept investigation based on primary data.

3.3 Reliability

Reliability concerns whether the results gathered by the study are repeatable or not. Reliability mostly concerns quantitative studies and the quantitative researcher is questioned whether the measure is stable or not. (Bryman.A, Bell.E 2007, p40) We have selected to use questionnaire in order to analyze the current perception of the Alvesta municipality. In order to attain reliability in our thesis and to be consistent in the questions, we based our questionnaire on theories and interview with the Alvesta municipality marketing manager that took place before executing the questionnaire. Also we had tutoring from our tutor professor and got revision from Tomas Hedevik the marketing manager in Alvesta municipality. Moreover we had testing with 10 respondents and had finally revised it to minimize the possibility of misunderstanding. According Bryman.A, Bell.E (2007, p163) there are three prominent factors related to reliability; stability, internal reliability, inter-observer consistency. In our case stability which is the consideration whether the measure is stable over time can be quite low since perception of people changes over time therefore the results of our qualitative

21 data may not be the same. For internal reliability which is about whether the indicators that make up a scale consistent or not, we can say that our indicators are highly coherent and this has been tested by the reliability correlation analysis. Lastly we have high inter observer consistency since we have conducted the questionnaire randomly at Alvesta municipality.

3.4 Validity

Validity concerns the reliability of the results that are made from a research. There are different aspects of validity such as measurement validity, internal validity external validity, and ecological validity. Validity is usually taken to refer to measurement validity. Measurement validity applies mostly to quantitative research and it is about whether the measure of the research that is developed of a concept actually reflects the concept that it is supposed to. (Bryman.A, Bell.E 2007, p41) One of the purposes of the study is analyzing the perception of the inhabitants by conducting questionnaire with simple and easy questions that are understandable. To obtain high validity we have referred the questionnaire based on the theories and organized it as simple structure as possible. Therefore we can argue that our measurement validity is fairly high. Even though there is one open end question that might cause lack of validity but the question was just to suggest ideas.

22 4. DELIMITATION

In this chapter we will state the limitations that we could have done more in this study if we had enough resource and time.

We do not have the financial and time resources to survey everyone living in Alvesta so we have selected representatives of 200-300 inhabitants of our thesis for the sampling survey. Also the questionnaire will not take place in Grimslöv, Torpsbruk and Hjortsberga regions due to the limit of resources thus we have selected three representatives region Alvesta, Moheda and Vislanda. We will not cover all the gaps in the Gap Analysis since our major study is focus on the perception of the inhabitants and the management responsible level not within the internal gap. Also the chosen gap 1, 4, 5 will not cover all the features since this theory is considering that this theory is for service company.

23 5. EMPIRICAL FINDING

In the Empirical Finding chapter it will state the empirical data collection quantitatively and qualitatively. It includes questionnaire and 2 interviews results.

The empirical data consist of two interviews and one questionnaire that were sent out to inhabitants of Alvesta municipality. The questionnaire was constructed after the interview with Alvesta municipality marketing manager Tomas Hedevik, which allowed us to develop a more profound questionnaire. The interviews that were conducted with the marketing manager of each Alvesta and Växjö municipality included questions concerned mostly Co- opetition theory and general information of SWOT.

Two interviews and 216 questionnaires from the respondents are included in the study. The interviews had open questions and the questionnaire had 25 closed end questions and 1 open end question. The questionnaire were handed out in 3 regions in Alvesta municipality; Alvesta, Moheda, Vislanda. We have collected 136 from Alvesta, 44 from Modeha, 36 from Vislanda and in order to analyze the data the questionnaire were categorized in the location where they live. Among the total 216 questionnaire 10 were excluded from the collection that had too many empty answers (more than 10 empty answers) or those who responded but has no connection to Alvesta municipality or Växjö municipality. For more details see appendix 1.

5.1 Questionnaire answers

The computer program SPSS has been used in all questions of the questionnaire, but with different output methods such as normal frequency tables with percentages, cross tabulation, and mean analysis. Normal frequency tables are simple but highly useful for normal demographic questions in a questionnaire. It tells valid and missing percentages and the total number of respondents in each question. Cross tabulation is useful when two or more variables are involved and one is trying to establish the relation between these variables. In our case it is helpful because we can keep one factor as independent when analyzing what happens to other factors.

24 Mean analysis is useful when dealing with a scale. Several of our questions are built up this way and let us understand the difference in mean in the different urban areas of Alvesta municipality. We have used scale 1 to 5 which refers to very dissatisfied and very satisfied. Now follows a short list of the different variables that are being dealt with in this questionnaire analysis. N is equal to the number of respondents in each question. Mean is a central term in statistical research. It is the sum of all numerical values observed in the data, divided by the number of observations involved. It helps to understand the average response if the question for example is a scale of 1 to 5. Standard deviation (Std. D) is the average scatter around the mean and helps to understand where the majority of the values are located.

Within the empirical answers with Inside A stands for Inside Alvesta municipality and Outside A stands for other regions.

5.1.1 Demographics of the respondents The first five questions concerned the Inhabitants demographics. In the questions that regard respondents’ age, household status and employment, there was a 100% valid rate and therefore 0 % rate of missing. However, the question that regard work location and living period has 7% and 23% missing because there were elder people who have retired from their work and the living period question was not answered by the people who live outside Alvesta and Växjö municipality. For the detail case processing summary see appendix 2. In the appendix 3, cross tabulation has been used in order to keep one factor constant and at the same time look at another demographic variable. The column of the table is categorized by the living location of the respondents and the row is sorted with age, household status, employment, work location and living period in Alvesta municipality. The factor that remains constant is living location in order to see the difference in age, household status, employment, work location and living period in the different urban areas inside Alvesta municipality, outside Alvesta municipality and Växjö municipality. From the questionnaire 52.9% of the respondents were in the age group of 36-55 who live with their partner and with or without children. 85% of the total were employed or self employed who work in Alvesta municipality and majority of the respondents which is 79% lived in Alvesta municipality more than 5 years.

25 5.1.2 Questions 7-17 Service Gap The questions from 7 to 16 concerned the brand image of Alvesta municipality and perception of the inhabitants about the service provided by Alvesta municipality.

Cases Included Excluded Total N Percent N Percent N Percent Q7*Location 159 77.20% 47 22.80% 206 100.00% Q8*Location 158 76.70% 48 23.30% 206 100.00% Q9* Location 158 76.70% 48 23.30% 206 100.00% Q10*Location 158 76.70% 48 23.30% 206 100.00% Q11*Location 155 75.20% 51 24.80% 206 100.00% Q12*Location 158 76.70% 48 23.30% 206 100.00% Q13*Location 156 75.70% 50 24.30% 206 100.00% Q14*Location 159 77.20% 47 22.80% 206 100.00% Q15*Location 157 76.20% 49 23.80% 206 100.00% Q16*Location 153 74.30% 53 25.70% 206 100.00%

The table shows the number of respondents and the percentage of them in question 7 to questions 16. It also shows the number of excluded in each question, both in percentage and number of observations. However, the table is misleading because there were 47 respondents that lives in Växjö and outside Alvesta municipality. For example the excluded answers for question 14 in numbers and percentage are 47 and 23.8% but considering that inhabitants of Växjö and outside Alvesta municipality did not answer from question 6 to 22, the actual numbers and percentage is 0. In the questionnaire, they were not asked to answer 6 to 22 questions since they belong to a different municipality and thus have less opinion about Alvesta municipality service or brand image.

26 Location Q7 Q8 Q9 Q10 Q11 Q12 Q13 Q14 Q15 Q16 Alvesta Mean 3.87 3.06 3.57 4.36 3.36 3.32 3.35 4.09 3.03 3.09 N 68 68 67 67 64 68 65 68 67 65 Std.D 0.862 0.976 0.821 0.667 0.861 0.837 0.799 0.91 0.984 0.914 Vislanda Mean 3.56 3.2 3.2 3.6 3.68 3.44 3.48 4.28 2.92 3.29 N 25 25 25 25 25 25 25 25 25 24 Std.D 0.87 0.645 0.707 0.913 0.852 0.917 0.714 0.678 0.862 0.751 Moheda Mean 3.63 2.79 3.28 3.91 3.6 3.72 3.49 4.4 2.86 3.09 N 43 43 43 43 43 43 43 43 42 43 Std.D 0.787 0.861 0.666 0.84 0.821 0.797 0.798 0.695 0.843 0.781 Inside A Mean 3.57 3.09 3.26 3.96 3.43 3.32 3.61 4.35 3.17 3.1 N 23 22 23 23 23 22 23 23 23 21 Std.D 0.728 0.75 0.689 1.022 0.843 0.646 0.499 0.573 0.834 0.831 Total Mean 3.71 3.01 3.39 4.06 3.49 3.45 3.45 4.24 2.99 3.12 N 159 158 158 158 155 158 156 159 157 153 Std.D 0.829 0.874 0.755 0.854 0.848 0.826 0.747 0.783 0.906 0.838

Q7. Living in Alvesta municipality Q8. Marketing effort of Alvesta municipality Q9. General Image of Alvesta Q10. Infrastructure (railroads, roads etc.) Q11. Education (elementary school) Q12. Health care Q13. Elderly care Q14. Nature Q15. Cultural activities Q16. Attitude of municipality workers (municipality office)

The table 3 is a Compare means analysis with living location as an independant factor. The reason to put location as an independant factor is because the difference in means between the different urban areas should be viewable in the table. The questions that are involved are question 7 to question 16. The most interesting values have been highlighted with yellow and blue color. Yellow indicates the highest satisfaction and blue indicates the lowest satisfaction. The question with the highest percentage of satisfaction was question 14 which is nature of Alvesta municipality and the lowest percentage was question 15 which is cultural activities and the marketing effort of Alvesta municipality.

27 Q7 Q8 Q9 Q10 Q11 Q12 Q13 Q14 Q15 Q16 Q7 1 Q8 0.3697 1 Q9 0.5303 0.494 1 Q10 0.3637 0.1336 0.3204 1 Q11 0.285 0.3509 0.3177 0.1694 1 Q12 0.1546 0.1729 0.2963 0.1683 0.3749 1 Q13 0.1113 0.1807 0.2556 0.0121 0.2411 0.5277 1 Q14 0.2201 0.2176 0.1754 0.0328 0.154 0.1239 0.1158 1 Q15 0.3598 0.5342 0.4146 0.1095 0.1965 0.1302 0.1421 0.2127 1 Q16 0.2687 0.5009 0.3839 0.0984 0.2878 0.1266 0.1081 0.272 0.3357 1

This Reliability analysis allows analyzing the properties of measurement scales and the items that make them up. The Reliability Analysis procedure calculates a number of commonly used measures of scale reliability and also provides information about the relationships between individual items in the scale. The Cronbach model of internal consistency is based on the average inter-item correlation. Table 4 is the inter item correlation analysis for questions 7 to 16. It is made to see the correlation between the different items that makes up the scale in order to understand the reliability of the scale made in this research. The table is made only for the questions that use scale 1 to 5 in the questionnaire, which is question 7 to question 16. Table 4 illustrates the correlation matrix and show that 10 items make up the scale in our case. The values are between 0 and 1. A higher value means a higher reliability. The yellow color marks the highest values and the blue color marks the lowest value. What can be said about these correlations is that question 7 and question 9 is highly correlated with a value of 0.5303. The same goes for Q8 and Q15, Q8 and Q16, Q9 and Q15 and finally Q12 and Q13 with a value of 0.5277. Question 10 and 13 shows the lowest correlation which is highlighted with blue. A more complete scale reliability analysis from inter item correlation can be seen in appendix 4. The important values from that appendix 4 will now be mentioned. The Cronbach’s coefficient alpha is in our case 0.7694, meaning that it is above the acceptable value of 0.7. The material in the scales should therefore be considered having adequate internal consistency. The inter item correlation mean is in our case 0.2523 which is in the optimal range of 0.2 and .4. However, this mean is mostly reported in when the scale is made from less than 10 items so that the Cronbach’s coefficient alpha value becomes too low. (Lower than 0.7) The final variables that are highlighted regard the minimum and maximum values. Those values origin from the original correlation matrix and attempt to show, which values with the highest and lowest correlation in between the different items in the matrix.

28 Case Processing Summary Valid Missing Total N Percent N Percent N Percent Location * GAP 4 156 76 50 24 206 100 Q 17 GAP 4 Overpromised Alvesta Municipality Service no yes to some extent Total Alvesta 25 (16.0%) 15 (9.6%) 25 (16.0%) 65 (41.7%) Vislanda 7 (4.5%) 3 (1.9%) 15 (9.6%) 25 (16.0%) Moheda 17 (10.9%) 7 (4.5%) 19 (12.2%) 43 (27.6%) Inside A 4 (2.6%) 1 (0.6%) 18 (11.5%) 23 (14.7%)

Total 53 (34.0%) 26 (16.7%) 77 (49.4%) 156 (100%)

This table is made for question 17 whether the service provided by the municipality overpromised or not. As a normal frequency table the percentage and number of respondents who said yes, no and to some extent, is being shown. The difference between the different urban areas is also illustrated in this table. The total number of respondents can also be seen. The table belongs to gap 4 in the gap analysis theory in our research

5.1.3 Questions 21-23 Perception about Växjö municipality Case Processing Summary Valid Missing Total N Percent N Percent N Percent Moving Possibility * Reasons 141 68 65 32 206 100 Q 22 Reasons to move to Växjö Q21 service Nature shopping work others Total yes 2 4 7 23 20 56 2% 4% 8% 26% 22% 62% to some 5 1 5 14 9 34 extent 6% 1% 6% 16% 10% 38% Total 7 5 12 37 29 90 8% 6% 13% 41% 32% 100%

This table shows question 21 and 22 if the respondents would want to move to Växjö municipality if they had the possibility to do so and if they do what would be the reasons. It

29 shows if they answered yes or to some extent. The answer with no to this question which is 36.2% is excluded in the empirical finding since it has no relevance. The general attraction to Växjö from the view of the inhabitants of Alvesta municipality is the issue that is trying to be understood with this table. From question 22, 44 respondents answered other reason to move to Växjö and among them 11 filled in answers with different reasons such as school, culture activities, size of Växjö considering the access to other activities, social life in Växjö like parties, and living accommodations.

Case Processing Summary Included Excluded Total N Percent N Percent N Percent Perception * Location 202 98.1 4 1.9 206 100 Q 23 Perception of Växjö Location Mean N Std. Deviation Alvesta 3.62 66 0.65 Vislanda 3.36 25 0.57 Moheda 3.67 43 0.57 Inside A 3.39 23 0.58 Outside A 3.50 8 0.76 Växjö 3.86 37 0.63 Total 3.61 202 0.63

The table illustrates question 23. It shows to what extent the people in the different urban areas of Alvesta municipality are satisfied with Växjö municipality. The table for question 23 also illustrates what people from outside Alvesta municipality and what people from Växjö think about Växjö as municipality. The compare mean analysis was used and the scale from the questionnaire was 1-5 indicating very dissatisfied to very satisfy.

30 5.1.4 Questions 24-25 Co-opetition with Växjö municipality

Case Processing Summary Valid Missing Total N Percent N Percent N Percent Location * Coop 203 99 3 1 206 100 Location * Compete 202 98 4 2 206 100 Cooperation with Växjö * Competing with Växjö Crosstabulation Q 25 Competing with Växjö Total Q 24 no yes to some extent Cooperation no Count 10 7 10 27 with % within Cooperation 37.04 25.93 37.04 100 Växjö % within Competing 11.76 14.89 14.49 13.43 % of Total 4.98 3.48 4.98 13.43 yes Count 57 36 33 126 % within Cooperation 45.24 28.57 26.19 100 % within Competing 67.06 76.60 47.83 62.69 % of Total 28.36 17.91 16.42 62.69 to some Count 18 4 26 48 extent % within Cooperation 37.5 8.33 54.17 100 % within Competing 21.18 8.51 37.68 23.88 % of Total 8.96 1.99 12.94 23.88 Total Count 85 47 69 201 % within Cooperation 42.29 23.38 34.33 100 % within Competing 100 100 100 100 % of Total 42.29 23.38 34.33 100

This table illustrates question 24 and 25. The two questions regard the co-opetition theory in our paper. Question 24 regards the cooperation between Växjö and Alvesta and question 25 shows the competition between Alvesta and Växjö. Cross tabulation is used to find out what people think about cooperating and competing with Växjö. It illustrates the answers of the question (yes, no, to some extent) in both percentages and in number of observations. For this question inhabitants from Växjö municipality and other region was included. The highest percentage is cooperating with Växjö and not competing with Växjö which is 28.36% in total.

31 5.1.5 Question 26 Question 26 is an open question in this thesis and was asked in order to give an open word for extra comments in the end of the questionnaire. The answers that did appear have been translated from Swedish into English with as good accuracy as possible and will be presented in this section of the paper.

Question: 26. Do you have any suggestion on how Alvesta could be more attractive? Answers categorized in different classes:

Infrastructure The issues that the inhabitants’ feel that those could be improved regarding infrastructure are: Parking areas, the center, travelling centre, entrance signs to Alvesta, walking bridge over the railway, ATM machines and good broadband to the urban areas, the liberation of house lots around the lake, and more nature areas such as parks.

Cultural activities The wanting to be improved issues that regards cultural activities includes; more artists, festivals, leisure activities for children families and youth, and more tourism activities in Alvesta municipality.

Education The education can be improved in the following way according to the inhabitants: Better school politics, more money on good schools and competent teachers in general, and cooperation with Växjö municipality regarding education are suggested.

Politics In the political area the inhabitants bring up the following issues; more efficient municipality politicians in general and a higher ability to give propositions to the current politicians.

Other One other category has been made due to the fact that some suggestions are hard to place. The suggestions that are brought up by the inhabitants in this category is; more stores, create a major region in the middle of Småland by putting Alvesta and Växjö municipality together, more cafés, a lunch restaurant with lighter food, better communications within the

32 municipality, gas station/restaurant out by road 25, raise the competence level of the municipality workers, and a better hockey team.

5.2 Interview with Alvesta municipality

This interview was conducted April 23rd at Alvesta municipality office with Tomas Hedevik for 100minutes. This is the empirical data and not the full transcript of the interview. The questions and the most important part of the answers will be exposed in this part of the paper. Questions are categorized depending on what theory they belong to.

SWOT 1. What are the internal strengths of Alvesta municipality? The infrastructure to both individual and business purposes should be considered as strength. Also the social standard is strong in Alvesta municipality in comparison to other municipalities. This is a result of a test that is carried out every year. That test focuses primarily on elderly care and schools.

2. Within Alvesta municipality, would you say that there are committed employees? Is there superior management talent? Both questions are subjective but Alvesta municipality has lots of committed employees according to Tomas Hedevik’s general impression. Regarding the second question, he is satisfied with the civil servants but not with the politicians, due to unclear political target.

3. What are the internal weaknesses of Alvesta municipality? How well is marketing and branding strategy formulated within the municipality office? One of the weaknesses is that the marketing strategy is not well formulated even though that work is in progress. The main branding work consists of the platform that now is being communicated to municipality workers.

4. Why do you believe that there is a negative marketing image of Alvesta municipality? Alvesta is still dealing with its negative image which is small brother complex. It is because of the lack of marketing of Alvesta municipality. Alvesta has not done any branding activities even though they are considerably good in many areas. It is also due to the fact that the

33 position as marketing manager had been vacant for 2.5 years before Tomas Hedevik to work. The lack of marketing is a direct consequence of the negative image.

5. How much money is spent on research and development to improve the municipality in various ways? What is your R & D (Research and Development) spent on the most? Because the public sector does not use the term R&D, he cannot give any exact figures in this matter. The highest amount of money is spent on elderly care and schools in order to provide good services with a high efficiency level.

6. What are the external opportunities? Is there rapid market growth in Alvesta? There is not a rapid growth in Alvesta municipality. The focus is to attract more inhabitants and to help the current companies. If opportunities to attract more inhabitants appear it will be the most important issue.

7. Are there any alliances or joint activities with other municipalities? There is within the tourism area and the marketing area between Växjö and Alvesta. Also in the infrastructure business and the work with attracting conferences, there is cooperation. Another field with cooperation is the regional one, where buses and trains are coordinated.

8. What are the external threats? The biggest threat is the international urbanization trend, which affect Alvesta.

9. Why are people leaving Alvesta? Which age group is leaving Alvesta? Young people in general leave Alvesta. It starts with the high school students because there are more education options in other places such as Växjö municipality. A bigger city attracts more students because of more leisure activities for the young people.

10. What is the major competitor of Alvesta and why? Växjö and other big cities are the major competitors since it is a trend to move to bigger cities.

11. Are you afraid of their competitor, regarding their strategy of attracting new people to their place? Växjö is a possibility to Alvesta municipality because Alvesta can attract a different kind of people if it uses niche marketing. It will then get inhabitants that Växjö cannot satisfy.

34 Gap analysis 12. What services does Alvesta municipality provide to their inhabitants?

- School (preschool, not high school). - Elderly care. - Infrastructure in the municipality to some degree, but only the streets. - Planning of houses and industrial grounds. - Cultural activities. - General social responsibility.

13. How much direct contact do Alvesta municipality workers in general have with the inhabitants? How do they communicate? Because a municipality is a service organization means that there is a lot of direct contact. The business happens when people interact. There is no exact number on how much the municipality workers connect with the inhabitants.

14. Have any research been conducted in the past to understand the inhabitants’ perception? In 2006 there was research conducted, concerning the co-workers experience of the municipality but that needs to be compared with the inhabitants’ perception.

15. What is your opinion of the current services that Alvesta provides? Are they as good as you market them? Are the services over promised or not? Alvesta municipality provides good service but it cost more money to market it better. That money has to come from the taxpayers. He implies that Alvesta is too careful when it comes to promises. That is why the service cannot be considered as overpromised.

16. How do you answer the inhabitants’ requests? The means of communication means on the circumstances of the case. We use all means as e- mail, phone, reception, and directly from the webpage.

17. How do you believe that the inhabitants perceive the services given by the municipality? What do you think about the need of the people? Can Alvesta meet that need? To what extent do you think they are satisfied?

35 Every municipality has this gap. Alvesta is aware of the inhabitants’ need and it can meet this need. Alvesta municipality is rather average in that area. Decisions that affect many people are made on a daily basis.

Co-opetition

18. What is your current connection with Växjö municipality? Do you cooperate in any issue? The water line that goes to Växjö is one of the current cooperation. The same water will go to the urban areas of Alvesta municipality. Other work is being conducted with surrounding municipalities in the county when it comes to public traffic. There is also an informal cooperation with people who are trying to establish a company. Another cooperation that is so far on an informal basis as well is cooperation around the high schools.

19. What is the major competition issue with Växjö municipality? The inhabitants are what the competition is mostly about but in a way that is a complementary as well. It is a different style of living that attracts different people.

20. Do you believe that a more extensive cooperation relationship with Växjö municipality is a possibility for Alvesta to enter? To some extent that would be possible. It needs to be a win-win situation in order for that to happen. One of the joint ventures between Växjö and Alvesta now is a combi-terminal to unload crates from the railway. It is a cooperation that benefits both municipalities both environmentally and economically.

21. What do you believe could be the short and long term effects of such a relationship? In what ways do you believe that you could cooperate in? There are discussion about merging Växjö and Alvesta municipality into one municipality. As long as there is profit to make there could be much cooperation in many issues. However if they merge two municipalities, Alvesta would lose the branding strategy platform that it now partially stands on.

36 Branding strategy 22. What does the current branding and marketing strategy of Alvesta consist of? It consists of the basic platform “Big enough to let ideas be born and developed but small enough to allow everyone to be seen”. Also the logos and the graphic profiles is part of the branding strategy. Alvesta is in the beginning stage of creating a brand.

23. How has the image of the place been changed over time? It is difficult to say because four different well-defined areas characterize Alvesta. It has not changed much because there has never been any clear branding strategy. The objective is to make an opportunity of these four brands and unify them into one in order for a good branding strategy can emerge.

24. What is the Alvesta municipality leaders’ vision? The overall vision is basically to provide good service to the inhabitants and to expand the municipality. That regards mainly inhabitants but also more different companies.

25. What are the festivals, cultural activities, sports and leisure events planned by the city? - Alvesta yran /- Alvesta market /- Allsång /- Moheda days /- Huseby Christmas market The municipality does not organize much by itself but are cooperating and sponsoring these activities.

26. What are the unique infrastructure facilities like cultural centers and conference facilities of Alvesta? Neither of them exists to a great extent in Alvesta. Folkets Hus by the library is one of few things that exist. Conference facilities are a question for commercial powers, not the municipality. There are some planning and grounds for building conference facilities.

37 5.3 Interview with Växjö municipality

This interview was conducted May 20th at Växjö municipality office with Thomas Karlsson for 60minutes. The questions are mainly about the co-op theory. This is the empirical data and not the full transcript of the interview.

1. What are the strength, weakness, opportunity, and threat of Växjö? The most powerful strength of Växjö is that it is the greenest city in Europe. The city uses fossil fuel free and has reduced the fossil fuel by 30% and until 2010, it is aiming to reduce 50%. Second strength is that Växjö is a university city. Third strength is that Växjö is an entrepreneurial city with many new companies coming to the area near Växjö municipality. Unemployment is also low, 2%. Lastly the culture and sports activities make Växjö a better city. The weakness of Växjö is that it lacks infrastructure. The municipality needs better roads and railroads. Also it is not close to coast. The opportunities of Växjö are 4 factors related to the strength. Växjö is a university city, which has lots of future engineers who can work in the near companies in Växjö municipality. Another opportunity is that new markets that are closely connected such as Russia and so on. Lastly it is the better living style. The threats are recession, internalization such as competing with higher level of merchandize. Also many people are leaving to bigger cities such as Stockholm because of the so-called brain drain.

2. What is the brand image like in Växjö? Before Växjö had Dynamic Växjö as its brand but now it is building a new brand “The Greenest City in Europe”. It has comprehensive and successful work with climate issues that enabled Växjö to win awards and get attention in both the national and international media.

3. Are there any alliances or joint activities between Alvesta and Växjö? What is the motivation of those? 4. In which issues do you cooperate and compete with Alvesta municipality? 5 municipalities near Växjö are integrating such as education, shopping, working and business and so on. Especially with Alvesta, Växjö center is 19km away from which takes 30 minutes

38 by car. That creates the possibility for people to work in each region. 7000 workers from Alvesta commute to Växjö and 4000 workers commute to Alvesta from Växjö. From this phenomenon you can say that people think it is cheap to live in Alvesta and work in Växjö. Växjö cooperate with Alvesta within 8 areas.

Water supply/ Tourism/ Special Leader program/ Garbage handling/ Prize for the successful company/ Newspaper for the households in Alvesta and Växjö municipality which is published 2 times a year / Växjö and company (conference company)/ Education, different high school program to attract more students

Also politicians were talking about emerging the two municipalities within 10 years. When it comes to competition attracting more inhabitants is a big issue in the municipality. It is said that every inhabitant spends 45,000 sek. Växjö as a big brother compare to Alvesta is being more generous like cooperating in business areas for the companies but Växjö is competing with bigger cities like Jönköping.

5. How do you communicate with Alvesta municipality? There are regular meetings in the political leader level and the managers of the marketing level. It is conducted 4-5 times a year. Tomas Hedevik and Thomas Karlsson often have a special committee meeting to discuss common projects for cooperation such as the newspaper, leader program, tourist brochure, and other issues.

6. What is the core competence or core value of Växjö municipality? As said before the environment The Greenest City of Europe, business, University City, culture facilities.

Environment Växjö - The Greenest City of Europe

Growth Quality of Life Hospitality

< Figure 3 The Expansive Växjö Network, 2008 >

39 7. What do you think are the advantages and disadvantages of cooperating and competing with Alvesta municipality? Advantages are more than disadvantages. Växjö is willing to merge two municipalities. Since the tax issue is important for municipalities and the municipalities have to be bigger and bigger for better services for the inhabitants. Also the population of the elder age group is growing. Although emerging Växjö and Alvesta is a political issue.

Alvesta is a strong municipality compared to other municipality, smaller municipalities are losing its inhabitants, even though Alvesta has a low growth rate and it is increasing. The railroad can be a threat to Växjö but it will compete with fast train(X2000) in the future.

40 6. ANALYSIS

In the Analysis chapter the empirical data is analyzed and examined. Also the theories are used in comparison to the data findings to validate the integration of the theories.

6.1 SWOT Analysis of Alvesta municipality

To identify the current image of Alvesta municipality it was crucial for us to start analysing the internal strengths and weaknesses and external opportunities and threats. The purpose is to seek the best strategic brand fit for Alvesta municipality by highlighting its strengths, minimizing weaknesses and further more to pursue opportunities and avoid threats. First according to Tomas Hedevik the Alvesta municipality marketing department level the strengths are the infrastructure which is for both the inhabitants and business. Alvesta municipality has enough ground and the rail road which makes it more attractive. Also the social service standard is strong in Alvesta municipality in comparison to other municipalities. (Interview TH: question 1) There are many committed workers in Alvesta municipality which works as a strength as well. (Interview TH: question 2) From the inhabitants point of view the strength of Alvesta municipality was its nature which we have found out by the questionnaire, table 3 question 14. People answered with the highest satisfaction with the nature and the infrastructure comes next. Interesting fact is that people who live in Alvesta showed the highest satisfaction when it comes to infrastructure which is 4.36 in mean, it can be said that they are satisfied with their railroads. The weakness of Alvesta municipality is the marketing strategy that is not developed strong enough. Due to this lack of marketing strategy Alvesta municipality is not branding its attractiveness enough. The main cause of this weakness is because it did not have the position as marketing manager and the manager had been vacant for almost 3 years. (Interview TH: question 3, 4) This is also shown in the perception of inhabitants from Moheda and inside Alvesta municipality that they were dissatisfied the most in marketing effort of Alvesta municipality which was the answer from question 8 table 3. Moreover the inhabitants perceived the weakness of the Alvesta municipality as lack of culture activities from question 15 table 3. Even though Alvesta municipality is not fully in charge with the cultural activities people were dissatisfied with it and resulted in the lowest satisfaction in total. Also we have questioned the money spent on the R&D but Tomas was not able to give us exact figures of R&D, since Alvesta is a place not a company. However we believe that this

41 can be considered weakness since from the SWOT theory (Ferrel et al. 1993) weak spending on R&D can be considerably important issue to regard as weaknesses and to know the amount of money spent for the R&D is imperative as well. (Interview TH: question 5) The external opportunities, according to Tomas Hedevik, are to attract more inhabitants and to help the current companies. (Interview TH: question 6) Also he thinks that Växjö municipality is an opportunity and according to the theory other firms seeking alliances can be an opportunity (Ferrel et al. 1993), thus Växjö municipality can be beneficial to Alvesta municipality. Also Växjö municipality can be important opportunity because it will allow Alvesta municipality to attract different people by using niche marketing which will make people to move to Alvesta municipality that Växjö cannot satisfy. This is meeting the changing needs and wants of the people according to the SWOT theory. Also they have joint activities together such as tourism, business infrastructure, and transportation. (Interview TH: question 7, 11) We have not directly asked the inhabitants the opportunities of Alvesta municipality but when it comes to the Växjö municipality they answered in table 8 question 24 with 62% of positive answers about cooperating with Växjö municipality. On the other hand in table 8 question 25 they showed negative answers when it comes to compete with Växjö municipality. Thus it can be said that the marketing level thinks that Växjö municipality is an opportunity and the inhabitants think that Växjö municipality can be more an opportunity when they cooperate together. This issue of cooperating and competing will be analyzed in more detail in the Co- op analysis. External threat of Alvesta municipality from Tomas Hedevik is the international urbanization trend, which affect young people leave Alvesta municipality. They go to bigger cities because there are more education options and more leisure activities for the young people especially students. (Interview TH: question 8, 9, 10)

6.2 Alvesta Service Gap Analyses

It is important for Alvesta municipality as a place to offer a core benefit to the inhabitants in order to be attractive. For Alvesta municipality providing the best service is their main objective so we have analyzed the gap between the perceived service and expected service, service delivery, inhabitant’s expectations and management perceptions of inhabitant’s expectations by applying gap 1, 4, 5 from the theory.

42

As mentioned before in the theoretical part of the gap analysis, the size of gap one which is known as the management perception gap, is dependant of several factors; marketing research orientation, upward communication and levels of management. (Zeithaml, Berry & Parasuraman, 1988, p 38) According to Tomas Hedevik, the last research about perception occurred in 2006 but regarded only the coworkers’ perception about Alvesta municipality. (Interview TH: question 14) No research has been done regarding the perception of the actual inhabitants. The fact that the position as marketing manager also had been vacant for the last 2,5 years (Interview TH: question 4) before Tomas Hedevik got his current position, makes it difficult for anyone at the municipality office to understand the actual perception of the inhabitants regarding services. The lack of marketing effort can therefore be considered as creating gap one in Alvesta municipality, which is consistent with the theory of gap one in the gap analysis where the authors argue that lack of marketing research will make gap one bigger. (Zeithaml, Berry & Parasuraman, 1988, p 38) Hedevik has the current speculation that the inhabitants’ currently perceive the services provided by the municipality as average. (Interview TH: question 17)

Gap four, which is the communication gap concerns the external communication factors that affect the perception of the service delivery. The existence and the size of the gap depend on horizontal communication and the propensity to over promise, explained in the theoretical part of this research. (Zeithaml, Berry & Parasuraman, 1988, p 44) In Alvesta municipality, the horizontal communication regards the communication between municipality politicians and municipality workers. According to Hedevik, Alvesta municipality lacks a clear political target. (Interview TH: question 2) Such a statement suggests that the contact between cooperating departments within Alvesta municipality is not as good as it should be. Based on the theory, poor interaction between departments leads to an extension of gap four. (Zeithaml, Berry & Parasuraman, 1988, p 44) Therefore, the contact between politicians and the municipality workers that are in work of developing the brand is an important connection that is needed to function well in order to make a decrease in gap four.

The propensity to over promise regards to what extent the municipality over promise the services that they provide to the inhabitants.

43 A direct question regarding this question was asked in the questionnaire. The results of that question are illustrated in table 5 for question 17. The question gave three different answering possibilities (no, yes and tome some extent) and showed that 34 % answered no, 16.7 % answered yes and 49.4 % answered to some extent. Hedevik on the other hand, believes that the marketing of the municipality’s services are not over promised and implies that Alvesta is too careful when it comes to the marketing of its services. (Interview TH: question 15) In this gap, Hedevik’s answer does not concur with the voice of the inhabitants’ and based on the theory, it can therefore be suggested that gap four in this matter exists and is considerably large. One cannot say that this gap exists because the services of Alvesta municipality are over promised or not but it exist because the perception of managers and the perception of the inhabitants differ.

Gap five is the perceived quality gap, which is more of a summarizing gap than a separate part of analysis in the theory. (Zeithaml, Berry & Parasuraman, 1988, p 45) The questions from our survey that is important for the analysis of this gap are questions 10 to 15. These are all questions where the answers can be determined from a scale from one to five which indicates very dissatisfied to very satisfied, and they all show services provided by the municipality. In the mean analysis of table 3, one can easily spot the average answers from these question. The table shows that question 10, that regards infrastructure, shows a figure well above average in many of the urban areas in the municipality. 4.36 in Alvesta and 3.96 inside Alvesta (other urban areas in the municipality) that gives an average total mean of 4.06. This indicates that the inhabitants were very satisfied in total. Question 11 (education) shows among other values, 3.68 in Vislanda and a total value of 3.49 which is still above average. Question 12 (health care) shows among other values 3.72 in Moheda and a total value of 3.45, which is in between average and satisfied. Question 13 (elderly care) also shows a value of 3.45. Question 14 (nature) is the only question with a mean above 4 from every urban area in the municipality, which gives it an average answer of 4.24. Question 15 (cultural activities) is the question with lowest average answer among these questions 2.92 in Vislanda and 2.86 in Moheda gives a total value of 2.99, which is just below average. These numbers from our research shows a general perception of the municipality that is average to good, which is consistent with Hedevik’s speculation regarding the service perception. Something that is also important to understand regarding the questions 10 to 15 is the degree to which the correlations between the questions are reliable or not. It is illustrated

44 in table 4 in the empirical findings and shows the questions that have the strongest and weakest correlation in between each other. Health care and elderly care are highly correlated questions but infrastructure and elderly care are two uncorrelated services.

When summarizing the analysis of gap one and four, one can with base on the theory say that there is a negative gap in Alvesta municipality regarding the different views of inhabitants’ and marketer’. That includes all subjects previously analyzed such as the degree of marketing research, horizontal communication and the propensity to over promise the service. The existing negative gap of Alvesta municipality service will give negative impact on its brand. The gap that exists due to the inconsistency in the perceived service with expected service will affect the brand image negatively. Therefore it is imperative to close this gap and to offer better service quality.

6.3 Alvesta Municipality as a brand

The place theory explains three parts of the brand that are important in order to understand and develop the brand: brand identity, brand positioning and brand image. These three parts of the theory and interview with Tomas Hedevik and the questionnaire will be used to analyze the brand of Alvesta municipality. Brand identity explains how the owner or the company wishes the brand to be perceived. It is important to have a clear brand message and specify the meaning of the brand. (Kapferer, 1997, 94p) The owner is not a single person in our case, since Alvesta municipality is a place and not a company. Therefore Alvesta municipality as a whole considering the municipality workers and the politicians are the brand owner. Tomas Hedevik, who was an interviewee in this research as marketing responsible, should be considered as a person with knowledge and a considerable amount of influence of the actual brand. From the interview with Tomas Hedevik we have found out that Alvesta municipality has the basic brand identity platform “Big enough to let ideas be born and developed but small enough to allow everyone to be seen”. But it is in the initial stage and the inhabitants are barely aware of it. (Interview TH: question 22) When the brand is in the initial stage it is imperative for the brand decision maker to understand the goals and objectives of the branding. (Kapferer, 1997) Alvesta municipality has a clear overall vision to provide good service to the inhabitants and to

45 expand the municipality. (Interview TH: question 24) Tomas Hedevik wishes the brand message to be well perceived by the current inhabitants even though there are difficulties in achieving such a goal in reality. The fact that Alvesta municipality is divided into four different strong areas, where the brand is different in each area, unifying the brand can be considered difficult. (Interview TH: question 23) Such an issue can be considered as both opportunity and threat when it comes to establish brand identity. It is a threat because if one does not understand the different need and character of the different urban areas in Alvesta municipality, one can have difficulties to create a successful brand. However, it is an opportunity because if one does find the different characteristics of the urban areas, then the place can also be marketed as a place with multiple characteristics, which in turn could attract more people to Alvesta municipality.

The second part of the brand is the brand positioning. It contains the value that has to be communicated to the target group. It is essential that the place also promote its key values and advantages (Kotler et al, 1993). In the case of Alvesta municipality, it is the marketing of all the services provided the municipality office by itself or the issues, to which they have some sponsoring responsibility. Alvesta municipality has been working with its brand positioning with its brand platform which is stated above. As the brand identity platform Alvesta municipality’s primary benefit as a place is to provide good service to the inhabitants and to attract more companies. Positioning a brand for Alvesta municipality means emphasizing the distinctive characteristics that make it different from its competitors and appealing to the public, therefore it should put more marketing effort to position itself. From the questionnaire we have found out that marketing effort of the Alvesta municipality was the lowest. See table 3. Actually Alvesta is not marketing itself enough about its good services which are also stated in the Gap analysis. There are some monetary issue regarding to this(Interview TH: question 15) but successful brand must try to reflect what the core values stands for and make special comparison to other brands which helps identifying its own brand.(Barnes 2003) The brand image of Alvesta municipality is the actual perception of what the inhabitants have. According to Barnes (2003) it is important to create a strong brand image in the consumers mind and the brand image is built up by associations in the perception of consumers mind. Creating value for the consumers leads to the satisfaction of the brand and its loyalty. For Alvesta, before building a strong a brand it is more crucial to understand the perception the inhabitants have, thus we have conducted the questionnaire and gained considerable data. First of all the perception of the general image of Alvesta municipality was above average and

46 Alvesta inhabitants had the highest satisfaction.(Table 3) However if we compare the total mean of perception about Alvesta and Växjö municipality, there is higher satisfaction in Växjö municipality. Alvesta municipality = 3.39 (table 3) Växjö municipality = 3.61 (table 7)

Interesting fact is that the inhabitants from Alvesta who shows the highest satisfaction of Alvesta municipality’s image shows higher satisfaction to Växjö municipality brand image which is 3.57 and 3.62. The inhabitants who live in Växjö municipality also show high satisfaction of its own place which is 3.86 (table 7) Also the brand image is highly correlated with the perception of Alvesta municipality which shows the highest correlation value 0.5303. (see table 4 question 7 and 9) As stated before in the SWOT and Gap analysis the most negative perception of Alvesta municipality is the lack of the cultural activities. From table 3 we can figure out that the cultural activities and the marketing effort had negative perception to the inhabitants. According to Tomas Hedevik, the municipality does not organize cultural activities by itself but cooperate and sponsor activities such as; Alvesta yran /Alvesta market /Allsång /Moheda days /Huseby Christmas market (Interview TH: question 25) Even though cultural activities are not municipality’s responsibility, from the table 4 reliability analysis, there is significantly high correlation with the marketing effort and the image of Alvesta municipality. Moreover Alvesta municipality does not have any unique infrastructure facilities for cultural centers and conference facilities and this is also not in the municipality level to build. However there has been some planning for building conference facilities.

Therefore we can conclude that Alvesta municipality from its inhabitants has average perception of its brand image but it can be improved better by strategic brand positioning such as highlighting its strengths, minimizing weaknesses and further more to pursue opportunities and avoid threats. To become more successful as a brand regarding the external factor will be stated in the following chapter.

47 6.4. Co-opetition with Växjö municipality

There has been an ongoing cooperation and competition relationship between Alvesta and Växjö municipality over the years. Växjö municipality is an opportunity and a threat to Alvesta municipality. Everyday 7000 workers from Alvesta commute to Växjö and 4000 workers commute to Alvesta from Växjö which proves that there is high amount of interaction going on within each other. (Interview TK: question 3) In order to analyse the relationship with Växjö municipality we have so far analyze the SWOT of Alvesta municipality and service gap regarding the brand position finally its brand as a place. Our last purpose of this study is to seek mutual beneficial relationship for both Växjö municipality and Alvesta municipality. Therefore we will apply co-opetition theory with the empirical finding we gathered from the two interviews and the questionnaire.

6.4.1 SWOT of Växjö municipality In order to understand the current relationship between two places, and how that relationship can improve with cooperation and competition, one must first understand the strengths weaknesses, opportunities and threats that each place has to deal with on their own. That is a way to understand what both place need and benefit from. When it comes to the relationship between Växjö and Alvesta municipality, a SWOT analysis has already been made for Alvesta municipality. A SWOT analysis for Växjö municipality is now required, before one can understand the relationship between the two places.

According to Thomas Karlsson, one of the strengths of Växjö municipality is that it is the greenest city in Europe. (Interview TK: question 1) Such a statement suggests that Växjö municipality has strong ability to create a brand. Based on the SWOT analysis theory, this can be considered as a core competence in the internal strength table 1. (Ferrel et al,1999) It most likely means a good market image for the place in general, being able to stand out from other cities. For a city to be able to utter such a thing as being the greenest city, it must follow European variables and standards for what can be considered as green in different perspectives. It also requires making own research regarding what the variables look like and the ability to make short and long-term goals that will be backed up with clear political direction. The fact that Karlsson say that Växjö municipality has reduced the utilization of fossil fuel by 30 % and is aiming to reduce fossil fuel by 50 % in 2010 suggest those

48 important abilities. It also suggests that even though Växjö is the greenest city in Europe, they are still aiming to make the municipality even better, using different targets. That driving power means committed employees which is considered as an internal strength in the general SWOT analysis. (Ferrel et al,1999) Karlsson utter that strength of the municipality is that Växjö is a university city. (Interview TK: question 1) It does not mean that all students will stay and work in Växjö for the rest of their life because they graduate from the university in Växjö. However, it does give the municipality and near lying companies a good recruitment ground where possibly high motivated people can be found. This is an opportunity as well as a strength that Växjö municipality can take advantage of. The third strength that Karlsson mention is that Växjö municipality is an entrepreneurial municipality with lots of companies that settle down in the area around Växjö. (Interview TK: question 1) This is also an issue that can be suggested to be both an opportunity and strength. Naturally, these companies could explore the previously mentioned strength with Växjö as a university city and decide to recruit people there. The last strength mentioned by Karlsson is that the unemployment level is considerably low. It is around 2 % as it is now. (Interview TK: question 1) That can be suggested to be a direct consequence of the previous strengths of Växjö municipality. Lots of entrepreneurial companies find good manpower at the university, which in turn leads to a low unemployment level in the municipality. Lastly, Karlsson mention the multiple cultural and sport activities as strength for Växjö municipality. (Interview TK: question 1) Such strength could make the youth stay in Växjö for both high school and university, without leaving town for extra activities outside the school. It is also important for all other people in the municipality such as children families, retired people and normal workers for that matter.

One of the weaknesses of Växjö municipality that Thomas Karlsson mentions is the infrastructure. (Interview TK: question 1). The municipality requires better roads and railroads for better connection to other places in the surrounding area. Another municipality problem is that Växjö municipality is not close to the coast. Naturally, nothing is going to change such an issue, but to some extent it is a lack of strategic location for the municipality. When connecting that to poor infrastructure, one can suggest that it can be difficult for the companies in this place to transport merchandise to the nearest ports in a fast and convenient way. That can be suggested as an internal weakness based on the SWOT analysis theory.

49 (Ferrel et al, 1999) It can also be said that too little of the R & D budget is spent on better infrastructure

The primary opportunities have already been mentioned. The university is an opportunity for the companies and the other way around. One of the opportunities that so far have not been mentioned is the close connection to new markets such as Russia that is uttered by Karlsson as important. (Interview TK: question 1) It suggests that if Växjö municipality can use this opportunity, it can put the place on the international map and develop more extended international contacts with companies and places in those markets. According to the SWOT analysis theory, it can be said to be alliances with other places. (Ferrel et al, 1999)

Karlsson also mention some threats that are related to Växjö municipality such as recession, tough competition on the international markets, regarding merchandise and inhabitants leaving to other bigger cities such as Stockholm. (Interview TK: question 1) Naturally, developing international relations comes with a side effect. It is not for certain that Växjö municipality can keep up with the tempo required on the international markets. As taken from the theory, this can be considered as connected places developing new strategies that make things harder for Växjö municipality. (Ferrel et al,1999)

6.4.2 Cooperation and Competition with Växjö municipality In order to develop successful co-opetition relationship, it is required to analyze the current activities that both municipality cooperate and compete. From the interview we have categorized the activities they cooperate and compete. We will first analyze the cooperating activities. “Co-opetition” describes cooperation as a situation in which independent parties co-operate with one another and co-ordinate their activities, thereby collaborating to achieve mutual goals. (Zineldin, 2004, p 780) According to Thomas Karlsson and Tomas Hedevik the municipalities are collaborating in 8 areas. They share the same water supply line and handling garbage issues. They share information in tourism and publish tourism booklet together every year and publish newspaper for the households in Alvesta and Växjö municipality, 2 times a year. They also work together with special Leader program and awarding the annual prize for the successful company in the municipality. There is “Växjö and Company” (Växjö och Företag) that work for conferences in the municipality. Lastly they cooperate with education by having different high school program in each municipality to

50 attract more students. (Interview TH: question 18, Interview TK: question 3) In addition there is also an informal cooperation with people who are trying to establish a company. (Interview TH: question 18)

In co-opetition theory the two parties mutually interact by collaboration but they can at the same time compete with each other. (Zineldin, 2004, p780) The competition for Alvesta municipality is the inhabitants moving to Växjö municipality. (Interview TH: question 19) This competition can also be found in the perception of Alvesta municipality inhabitants. We have asked the inhabitants whether they want to move to Växjö municipality and 42.8% said yes, 10.7% to some extent. The biggest reason was the work which was 41% and this indicates that Alvesta municipality might lose its inhabitants to Växjö municipality due to the competition in work and business. (for more detail see table 6) Attracting inhabitants has been major competition between two municipalities since one inhabitant spends 45,000 sek which is great benefit to the municipality economy. Also the municipality is depending on the taxes the inhabitants pay therefore it is important to attract more people. For Alvesta municipality is a competitor but it competes more with bigger cities like Jönköping. (Interview TK: question 4)

All the activities in cooperation and competition between both municipalities highly affect the perception of the inhabitants and influence the brand image of Alvesta municipality. Therefore we have asked the inhabitants and also people living in Växjö municipality what opinions they have concerning this issue. Inhabitants’ perception of Cooperation and Competition with Växjö municipality is illustrated in the table 8. From the cross tabulation analysis table there is 4.98% of disagreement on both cooperating and competing with Växjö municipality which indicates passive opinion in co-opetition theory and 3.48 % answered for competing with Växjö municipality but not cooperating with them. On the other hand there is 17.91% of agreement in cooperating and competing with Växjö municipality but the highest percentage 28.36% of the people’s perception is to cooperate with Växjö municipality and not to compete with them. This indicates Alvesta municipality is still perceived weak from the inhabitants and still dealing with the small brother complex with Växjö municipality. (Interview TH: question 4) Lastly there is 12.94% who agrees to some extent of cooperation and competition with Växjö municipality.

51 6.4.3 Implementation of Co-opetition Strategy To implement the co-opetition theory, so far we have analyzed the SWOT of Växjö municipality and the current cooperation and competition activities between two municipalities. A feature of co-opetitive relationships are that the parties, which will be in our case both municipalities, adapt their processes and to achieve a better fit with each other. In order to obtain this fit there is a need to share information and experiences, and get rid of the sources of insecurity and uncertainty. (Zineldin, 2004, p 782) The criteria to seek for the best fit for each other will be stated below.

Criteria 1 Both municipalities should be willing to engage in an interactive exchange relationship that initiate with strong motivation. From the two interview conducted with the marketing responsible in Växjö and Alvesta municipality, we have found out that they have great amount of interest and motivation. Tomas Hedevik from the Alvesta municipality, he insists that the co-opetition strategy should be a win-win situation for both municipalities. (Interview TH: question 20)

Criteria 2 In order to maintain long term relationship each municipality should share the core value that each other wants. For Alvesta municipality its vision is to offer better service for the inhabitants. (Interview TH: question 24) Växjö municipality’s core value is the environment and it has a clear goal to be the greenest city of Europe. (Interview TK: question 6) Both of the municipality share similar value which is offering better service so that they can to contribute to attract more people. Moreover according to Zineldin (2004) each municipality should be willing to give up its “something of value” to receive in return the “something of value” belonging to the other party – in other words, the relationship is perceived to be mutually rewarding. Växjö municipality always has been generous as a big brother to Alvesta municipality (Interview TK: question 4) and Alvesta municipality is seeking win-win strategy which will allow both parties to give up of its “something of value” for mutual benefits.

Criteria 3 There should be clear defined arrangements when it comes to maintaining this co-opetitive relationship. Each municipality should be able to accept or reject terms and conditions of exchange.

52 Criteria 4 For successful and long term relationship it is important to communicate and interact without restrictions. Moreover each of the municipality responsible and politicians should have trusting attitude by sharing information and knowledge with each other. There has been regular communication between 2 municipalities in the political leader level and marketing level as well. The marketing manager Thomas Karlsson and Tomas Hedevik often have discussion in various issues for both municipalities. These meetings are imperative to keep the relationship and to build mutual integrity and act in honorable ways.

Criteria 5 When the co-opetitive relationship is implemented both parties should be able to strike a positive balance between the advantages and disadvantages of the relationship. It is vital to balance the positive and negative factors to prolong the relationship.

From analyzing these criteria and what the current status of the relationship between Alvesta and Växjö municipality is, one can view that the cooperation and competition already exist to some degree, between these two parts. Therefore it is now time to make a discussion, in what areas a more extended relationship could become a reality. According to criteria 2, a more extensive relationship can be pursued in the area where the municipalities have its core competences. One of the core competences of Växjö municipality is its high ability to shape and manage a brand. If Alvesta municipality could borrow some of the resources from Växjö municipality in this issue, could help the place get through the initiation face of branding. Such an agreement would be beneficial for both the municipalities because if Alvesta municipality develops a stronger brand, the region between the two municipalities becomes stronger as a whole, which can attract more companies and people. Naturally, if Alvesta municipality grows a stronger brand, it can compete with Växjö municipality to a higher degree. This kind of competition can still be good for the region since both the municipalities have different characteristics, and will therefore attract different companies that require different conditions for the offices and building sites. This kind co- opetition will also attract more people to the region as a whole, but at the same time Alvesta and Växjö municipality can compete with each other, where those people will move. The negative issue with this kind of co-opetition is that it is only Alvesta municipality that has a short-term gain in this issue. Växjö municipality only has a long-term gain because it will

53 take time for Alvesta municipality to develop its brand so that the region as a whole can benefit from this co-opetition.

Since Alvesta have a good set of infrastructure and Växjö do not, cooperation could be developed regarding this issue as long as both parties have something to gain. The cooperation can off course only regard the infrastructure that is municipality responsibilities and not responsibility of the state. The combi terminal that is being mentioned by Tomas Hedevik (Interview TH: question 20) is a good example of infrastructure cooperation between the two places that saves financial resources and is also beneficial for the environment in both the region as well as the country.

A third possible co-opetition issue can be seen when it comes to high school education. Both Alvesta and Växjö municipality have a problem with this issue, loosing people to bigger cities, where more education options exist. Cooperation in this issue would regard a major research study, funded financially by both the municipalities, trying to establish some guidelines for what the youth in these municipalities require in order to stay in the same municipality as where they finished the elementary school. Naturally, all things that today’s youth want to have in the municipality cannot possibly be funded, because the taxpayers money have limitations. However, such a study would help to understand where to put most effort so that the youth in the municipalities will be more satisfied than in the current situation. The competition in such an issue will regard the two municipalities trying to attract as much pupils as possible to each other’s high schools in the municipalities. Alvesta municipality benefit from this because it can help the municipality making more people stay in Alvesta municipality. Växjö municipality benefits from a co-opetition relationship regarding this issue. It not only to attract people to stay in the municipality for high school, but also for the university and possibly for a later job at the municipality or companies that are located around the place.

54 7. CONCLUSION

This final chapter will provide a conclusion of the study and an attempt to answer the problem discussion and purpose will be made. Lastly, the chapter ends with suggestions for further research about branding Alvesta municipality.

7.1 Conclusion of the Study

Alvesta municipality as a place is in the initiative stage of creating its brand. It has established its brand identity but showed lack of effort in positioning itself as a brand. Thus it has been losing its inhabitants to Växjö municipality and has negative perception by its own inhabitants. Our research have tried to analyze the current perception of the inhabitants regarding the service gap, marketing image, and co-opetitive relationship with Växjö municipality.

Alvesta municipality has great infrastructure as strength for both its inhabitants and for business proposes and it also has strong social service standard. On the other hand the weakness of Alvesta municipality is the lack of marketing of a place in general as well as the services that it provides especially the cultural activities. However it has great opportunities to attract inhabitants and companies by niche marketing and cooperating with Växjö municipality. International urbanization trend is the major threat losing its inhabitants to bigger cities.

According to Tomas Hedevik Alvesta municipality’s core value is to provide better service to its people. From our research we have found out that there were certain service gap between expected perception and existing perception. Gap one is dependent on the marketing research orientation, where we have found out that there is a gap due to inaccurate perceived service quality expectation in the management level. Gap four the external communication gap which occurs in the horizontal communication level exists to considerable extent. There is also a gap caused by overpromised of service delivery. Lastly the summarizing gap five tell us that there is a negative gap between expected services and perceived services.

Alvesta municipality and Växjö municipality has been cooperating and competing in many areas. In order to sustain long term relationship to create mutual value there is a need to

55 develop co-opetitive strategy. Both municipalities can benefit from each other in the areas such as branding, infrastructure and education service.

7.2 Suggestions for Further Research

The results that we have attained from this study have quite a few limitations. The main cause is due to the methodology and the lack knowledge in the theoretical framework.

In future research, more advance output analysis can be used for better understanding of the empirical data. For example regression analysis can be used to go deeper into analysis. In our studies we only used living location as independent variable but it is possible to analyze the empirical data with different variables from the demographic information.

Question 18 to 20 has been excluded in our analysis since it has no relevance to the Gap analysis theory which was going to be used in gap 4. The questions that we had were not understandable enough for the respondents to give clear answers. Therefore more thorough understanding of the theory and questionnaire design knowledge is required in future studies.

In order to analyze gap theory more profoundly further research can be conducted in gap 2 and 3 which about service quality specification and service delivery.

Therefore, we recommend further studies for Alvesta municipality to make a larger enquiry regarding the perception of their current inhabitants. Also further qualitative research should include political point of view since they are the important decision maker in the municipality and to indicate clear objective for the municipality.

56 8. REFERNECE

Articles:

Barnes. J.G. (2003), Establishing meaningful customer relationships: why some companies and brands mean more to their customers. Managing Service Quality, 13, pp178-186

Briggs, S.R., & Cheek, J.M. (1986), The role of factor analysis in the development and evaluation of personality scales, Journal of personality 54, pp 106-148

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Internet: http://www.vaxjo.se/vaxjo_templates/Page.aspx?id=1671 http://www.alvesta.se/pdf/kommunfakta07_eng.pdf http://spss.com

58 APPENDIX

Appendix 1 Data collection from the questionnaire

Alvesta Moheda Vislanda Växjö Inside A Outside A Total Actual 136 44 36 216 Collection

Exclude -4 -1 -5 10 Categorized by 68 43 25 37 23 10 206 living location

Appendix 2 Demographic case processing summary

Case Processing Summary Valid Missing Total

N Percent N Percent N Percent

Respondent's Age * Location 206 100 0 0 206 100 Household Status * Location 206 100 0 0 206 100 Employment * Location 206 100 0 0 206 100 Work location * Location 191 93 15 7 206 100 Living Period * Location 158 77 48 23 206 100

59 Appendix 3 Demographic Cross tabulation analysis

Respondent's Age * Location Crosstabulation Alvesta Vislanda Moheda Inside A Outside A Växjö Total % of Total 18-25 10 1 4 3 2 6 26 12.6 26-35 12 2 5 5 6 30 14.6 36-45 13 8 11 5 2 10 49 23.8 46-55 20 6 15 6 4 9 60 29.1 56-65 10 6 7 4 2 5 34 16.5 over 65 3 2 1 1 7 3.4 Total 68 25 43 23 10 37 206 100.0

Household Status * Location Crosstabulation Alvesta Vislanda Moheda Inside A Outside A Växjö Total % of Total single 13 3 2 5 1 7 31 15.0 partner without children 23 6 13 8 4 10 64 31.1 partner with children 26 14 21 9 3 16 89 43.2 with children 5 1 3 1 3 13 6.3 other 1 1 4 2 1 9 4.4 Total 68 25 43 23 10 37 206 100.0

Employment * Location Crosstabulation Alvesta Vislanda Moheda Inside A Outside A Växjö Total % of Total Empolyed 44 19 28 16 10 30 147 71.4 Self Employed 13 1 6 4 5 29 14.1 Unemployed 2 1 1 4 1.9 Student 6 1 3 3 13 6.3 Retired 2 2 2 1 7 3.4 Others 3 3 6 2.9 Total 68 25 43 23 10 37 206 100.0

Work location * Location Crosstabulation Alvesta Vislanda Moheda Inside A Outside A Växjö Total % of Total Alvesta 52 5 14 14 7 25 117 61.3 Vislanda 5 13 1 4 2 2 27 14.1 Moheda 2 1 11 1 5 20 10.5 Inside A 4 4 3 11 5.8 Outside A 1 2 1 1 5 2.6 Växjö 1 6 2 2 11 5.8 Total 65 21 37 23 10 35 191 100

Living Period * Location Crosstabulation Alvesta Vislanda Moheda Inside A Total % of Total <1 year 6 2 3 11 7.0 1-3 year 7 2 3 1 13 8.2 3-5 year 4 4 1 9 5.7 >5 year 51 17 38 19 125 79.1 Total 68 25 42 23 158 100.0

60 Appendix 4 Reliability Analyses – Scale (Alpha)

Item label list

1. Q 1 Living in Alvesta municipality 2. Q 2 Marketing effort of Alvesta municipality 3. Q3 Image of Alvesta 4. Q4 Infrastructure, social facilities 5. Q5 Social care - education 6. Q6 Social care - health care 7. Q7 Social care - elder 8. Q8 Nature environment 9. Q9 Cultural activities 10. Q10 Attitude of municipality workers

Correlation Matrix Q7 Q8 Q9 Q10 Q11 Q12 Q13 Q14 Q15 Q16 Q7 1 Q8 0.3697 1 Q9 0.5303 0.494 1 Q10 0.3637 0.1336 0.3204 1 Q11 0.285 0.3509 0.3177 0.1694 1 Q12 0.1546 0.1729 0.2963 0.1683 0.3749 1 Q13 0.1113 0.1807 0.2556 0.0121 0.2411 0.5277 1 Q14 0.2201 0.2176 0.1754 0.0328 0.154 0.1239 0.1158 1 Q15 0.3598 0.5342 0.4146 0.1095 0.1965 0.1302 0.1421 0.2127 1 Q16 0.2687 0.5009 0.3839 0.0984 0.2878 0.1266 0.1081 0.272 0.3357 1

N of Cases = 147.0 Item Means Mean Minimum Maximum Range Max/Min Variance 3.4755 2.9524 4.2517 1.2993 1.4401 0.1836 Inter-item Mean Minimum Maximum Range Max/Min Variance Correlations 0.2523 0.0121 0.5342 0.522 43.9893 0.0184

R E L I A B I L I T Y A N A L Y S I S - S C A L E (A L P H A) Reliability Coefficients 10 items

Alpha= 0.7694 Standardized item alpha= 0.7714

61 Appendix 5 Questionnaire

Questionnaire in English 1. Age  18-25 26-35  36-45 46-55  56-65  over 65

2. How do you live?  alone  with partner without children  with partner and children  with children  other

3. Where do you live?  Alvesta  Vislanda  Moheda  Other (within Alvesta municipality)  Other (outside Alvesta)  Växjö municipality

4. Occupation?

 Employed  Self-Employed  Unemployed  Student  Retired  On a Training Course  Other

5. Where do you work?  Alvesta  Vislanda  Moheda  Other (In Alvesta)  Other (outside Alvesta)  Växjö - If you live in Växjö, go to question 23

6. How long have you lived in Alvesta?  < 1 year  1-3 years  3-5 years  > 5 years

What is your general opinion of the questions stated below? very very Circle your option dissatisfied average satisfied 7. Living in Alvesta municipality 1 2 3 4 5 8. Marketing effort of Alvesta municipality 1 2 3 4 5 9. General Image of Alvesta 1 2 3 4 5 10. Infrastructure (railroads, roads etc.) 1 2 3 4 5 11. Education (elementary school) 1 2 3 4 5 12. Health care 1 2 3 4 5 13. Elderly care 1 2 3 4 5 14. Nature 1 2 3 4 5 15. Cultural activities 1 2 3 4 5 16. Attitude of municipality workers (municipality office) 1 2 3 4 5 17. Do you believe that the marketing of the municipality, regarding service quality, is overpromised?  no  yes  to some extent

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18. Rate your prefered communication means with Alvesta municipality office? 1-4 Telephone____ visit____ web page____ letter____

19. Was the communication method that you choosed as nr 1 in question 18, efficient?  no  yes  to some extent

20. How often do you contact Alvesta municipality?  no contact need  < 1 time/month  2-3 times/month  1 time/week  2-3 times/week

21. In the future, can you imagine moving to Växjö?  no  yes  I don’t know

22. If you would move to Växjö, what would be the reason?  Municipality service  nature  shopping  work, business  other______

23. What is your perception of the general opinion of Växjö municipality?  very dissatisfied  dissatisfied  average  satisfied  very satisfied

24. Do you believe that a closer cooperation with Växjö municipality could strengthen Alvesta municipality?  no  yes  to some extent

25. Do you believe that more competition with Växjö municipality could strengthen Alvesta municipality?  no  yes  to some extent

26. Do you have any suggestion on how Alvesta could be more attractive? _

Thank you very much for agreeing to complete this questionnaire.

63 Questionnaire in Swedish 1. Å lder?  18-25 26-35  36-45 46-55  56-65  över 65

2. Boendesituation?  själv  med partner utan barn  med partner och barn  med barn  annan

3. Hemort?  Alvesta  Vislanda  Moheda  annan plats (Inom Alvesta kommun)  annan plats ( utanför Alvesta kommun)  Växjö kommun

4. Sysselsättning?  anställd  egenföretagare  arbetslös  student  pensionär  utbildning i arbete  annan

5. Var arbetar du?  Alvesta  Vislanda  Moheda  annan plats (inom Alvesta kommun)  annan plats (utanför Alvesta kommun)  Växjö kommun

- Om du bor i Växjö, hoppa till fråga 23

6. Hur länge har du bott i Alvesta kommun?  < 1 år  1-3 år  3-5 år  > 5 år

Vad är din åsikt i nedanstående frågor? Ringa in ditt svar Mycket Varken Mycket Missnöjd nöjd eller

7. Att bo i Alvesta kommun 1 2 3 4 5 8. Marknadsföringen av Alvesta kommun 1 2 3 4 5 9. Generell åsikt om Alvesta kommun 1 2 3 4 5 10. Infrastruktur, (järnväg, vägar m.m) 1 2 3 4 5 11. Utbildning, (grundskola) 1 2 3 4 5 12. Vård 1 2 3 4 5 13. Ä ldreomsorg 1 2 3 4 5 14. Natur 1 2 3 4 5 15. Kulturella aktiviteter 1 2 3 4 5 16. Kommunmedarbetarnas attityd (kommunkontoret) 1 2 3 4 5

17. Anser du att kommunens servicekvalité är överreklamerad i marknadsföringen?  nej  Ja  till viss del

64 18. Rangordna dina kommunikationsmedel med Alvesta kommuns kontor? 1-4 telefon____ besök____ e-mail____ brev____

19. Var den kommunikationsform som du valde som nr 1 i fråga 18, effektiv?  nej  Ja  till viss del

20. Hur ofta kontaktar du Alvesta kommun kontor?  Inget kontaktbehov  <1gång/månad 2-3 gånger/månad 1 gång/vecka  2-3 gånger/vecka

21. Kan du tänka dig att flytta till Växjö i framtiden?  nej  ja  vet inte

22. Om du skulle flytta till Växjö, vad tror du att den främsta orsaken skulle vara?  kommunal service  natur  shopping  arbete  annan______

23. Vad är din generella åsikt om Växjö kommun?  mycket missnöjd  missnöjd  varken/eller  nöjd  mycket nöjd

24. Tror du att ett närmare samarbete med Växjö kommun stärker Alvesta kommun?  nej  ja  till viss del

25. Tror du att mer konkurrens med Växjö kommun stärker Alvesta kommun?  nej  ja  till viss del

26. Har du något förslag som kan göra Alvesta mer attraktivt? ______

Tack för att du ville delta i vår undersökning !

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